'We Are Not Facing A Single Crisis, But Three,' Says Hardeep Puri

The world is staring at three crises relating to fuel, food, and fertiliser that need to be resolved to spur global trade, according to Hardeep Singh Puri.

The discussion about inflation earlier centred on the developed countries' $20-trillion stimulus package, said Puri, union minister for oil and gas. But now, with higher oil prices, things have gotten exaggerated.

"Now I am worried a little more compared to when I made the statement in September about the world staring at a big recession," Puri, also the minister for housing and urban affairs, told BQ Prime in an interview. "We are no longer facing a single crisis, but rather three."

These three crises are related to fuel, fertiliser, and food, the minister said, but what is even more worrisome is that the world may be staring at a recession despite the falling prices.

"If the prices go up, the chances of further inflation being fueled are a given, and then you will see people finding it extremely difficult [to cope with the situation]," Puri said.

In a classic case of a recession in which people cut back on imports, big industries that depend on exports of goods and services get hurt.

"My feeling today, at the end of November," he said, "is that anyone with even a passing understanding of how the global economy works, with all its interconnections and integration, then, needs to resolve these three crises."

Although a $23 trillion economy like the U.S. is looking good and has bounced back, there is also a $12-trillion economy like China, where demand is muted due to constant lockdown, the minister said. "What will happen if China revives its growth momentum and the demand for oil goes up?"

"There is clearly an economic issue involved because of China's appetite for energy," the minister said. "It imports a fair amount, but at this point in time, its imports are not growing."

"Just imagine if China starts suddenly to revive the momentum that it has lost due to the severe lockdown policy, the zero Covid, attendance problems on the real estate market."

"If, for instance, suddenly the demand for oil in China goes up, then it will be a self-fulfilling prophecy in terms of prices going up at a time when the world is already in a recessionary condition," Puri said.

However, India is an exception, as airports, aircraft, and public transport all continue to work at full capacity with orders across sectors being received, according to Puri. "I think some of it is because people feel very confident and there is growth, which is a very welcome sign."

But India cannot be the only country in the world, along with the United States, that is doing well, Puri said. Large parts of Africa, Latin America, and Asia all need to be part of that growth story, he said.

"China is a very large part of Asia, and there are some worrying signs there, so if you're asking whether I'm worried, I'll continue to be worried," Puri said.

Watch the full interview here: